Rather, Apple's new Touch ID system only stores "fingerprint data", which remains encrypted within the iPhone's processor, a company representative said Wednesday. The phone then uses the digital signature to unlock itself or make purchases in Apple's iTunes, iBooks or App stores.
In practice, this means that even if someone cracked an iPhone's encrypted chip, they likely wouldn't be able to reverse engineer someone's fingerprint.

This seems relatively safe - but then again, only if you trust that government agencies don't have some sort of backdoor access anyway. This used to be tinfoil hat stuff, but those days are long gone.

I dislike the characterisation of privacy "hawks", though. It reminds me of how warmongering politicians in Washington are referred to as 'hawks", and at least in my view, it has a very negative connotation.

But they don't actually store fingerprints... So worst case scenario they are storing a hash of your fingerprint - which (if they do it right) cannot be used to determine the actual fingerprint that was used to compute the hash.

Presumably they're using a hash, but the article didn't state how they are storing the fingerprint data. It said they aren't storing an "image", so I erred on the side of ambiguity used fingerprint to reference whatever data is generated and stored.

Of course, it can't be used to get the actual fingerprint. Fingerprint scanners work by creating graphs of features on the finger.

The point is Apple hasn't released any information on how this works, so it's an unknown black box.

Then there is the anonymity aspect. How easy is the fingerprint signature to reverse? Now there is proof who the phone belongs to.

Again, it should be mathematically impossible, and if it isn't the lawsuits will start flying like bullets in a drive by...

Reverse was the wrong word. I should have used replicate since I was contemplating how hard it would be for some law enforcement agency to tie people to a specific phone.

I don't see any reason why they would store incorrect fingerprints - it just doesn't make any sense at all to do that (on a technical or functionality level).

Evidence that people tried to access the phone without permission.

If the phone is stolen, the thieves would provide evidence that they were in possession of the phone. If the phone is a company phone, people who are trying to circumvent security policies would be logged.

You kind of agree with this at the end of your post. The negatives are just as important as the positives.